The inside story of the takeover by Lithuanian group Tesonet that rescued basketball’s London Lions from liquidation following the demise of serial sports speculators 777 Partners.
For the London Lions and fans of the dual British basketball champions, it has been a summer of more twists and turns than a slam dunk contest — only a lot less fun.
As the business empire of former owners 777 Partners collapsed like a house of cards, the very existence of the London Lions was thrown into grave doubt, threatening the loss of the country’s leading basketball team and dozens of jobs.
Last week, a takeover by Tesonet, a Lithuanian tech company which also owns Zalgiris Kaunas in its homeland, was approved by administrators, saving the Copper Box-based franchise.
But the path to salvation was by no means straightforward, featuring court hearings, the very real possibility of liquidation and rival bids at the 11th hour.
This is the story of how the London Lions were saved.
Early warning signs
The business model of 777 Partners and the US investors’ ability to fund their operations had long been questioned but doubts grew about a more immediate danger to the London Lions in March.
It was then that reports emerged that the women’s team would not be entered into next season’s European competition — despite eventually making British basketball history by winning the competition in April — due to the costs involved.
While that seemed a localised issue at first, financial problems afflicting other parts of the 777 business began to mount up, hinting at an iceberg of issues just below the surface.
End of season
Domestic finals weekend in late May should have been a time for celebration as both the men’s and women’s London Lions teams won their titles, but serious questions continued to hover.
By now 777 was the subject of a US lawsuit brought by a London-based lender which accused it of fraud. It was also facing legal action in Belgium over its ownership of football club Standard Liege, while its proposed takeover of Everton was in tatters.
The London Lions were still operational, but in June rumours began circulating in the insolvency world that the club had run out of money.
Enter Tesonet
A period of uncertain silence followed but it was broken in late July when it emerged via filings to Companies House that Zalgiris Group had lent London Lions cash for working capital.
The security agreement was dated 15 July and filed 10 days later. At the same time, Zalgiris — bankrolled by Tesonet — was in talks with what was left of 777 to buy the London Lions.
On 31 July, they announced the acquisition of the London Lions with an article on the Lithuanian club’s website headlined “Tesonet and Zalgiris to dive into the London basketball market”.
Possible liquidation
That announcement proved to be premature, however.
Days earlier, on 25 July, London Lions had faced a winding-up order brought by creditors including HMRC, which could have resulted in liquidation.
“We were minutes away from the end of the London Lions,” said administrator Hasib Howlader.
The winding-up order was dismissed in court after lawyers argued that the club was about to go into administration at the request of a debenture holder — which was Zalgiris themselves.
It is understood that the club would have gone into administration even if Tesonet had completed a deal with 777, such was the volume of creditors.
Administration
Howlader and colleague Nimish Patel of insolvency experts Hudson Weir were officially appointed joint administrators on 30 July.
Their appointment was announced to the public via a press release on 7 August, sparking confusion and no small amount of concern among all those connected with the London Lions and British basketball more widely.
They were quick to insist that neither Zalgiris, Tesonet nor anyone else had bought the club, with Howlader telling City A.M.: “We haven’t sold the business. All I can say is that the only people who can sell the business are myself and Nimish and we haven’t sold it.”
At this point even those on the London Lions payroll were in the dark. Sam Dekker, who joined the Lions in 2022 after a career in the NBA and European basketball, posted on social media: “So do I have a job or no?”.
The London Lions were the subject of five offers before their eventual takeover by Tesonet
Rival interest
They set a deadline of 12 noon on 9 August for bids. Other suitors were quick to come forward.
It is understood there were three official bids with proof of funds, two more serious offers who pulled out without proof of funding and two or three other expressions of interest.
Among those to hold talks with Hudson Weir was R3 Sport, the management company of banker Jonathan Rowland, which is mainly involved in the fast-growing sport of padel.
It is believed the financial commitment required was in the region of £2m, to cover £1.1m in liabilities plus other good will payments and assets.
BBL demise
The London Lions weren’t the only victims in British basketball of 777’s disintegration, however.
The US firm was also a 45 per cent shareholder in the British Basketball League itself, a stake it acquired in 2021, the year after it bought the Lions.
Financial problems at league level saw GB Basketball strip the BBL of its licence to run Britain’s professional basketball leagues in mid-June.
Taking its place would be Super League Basketball, an entity formed by a consortium of top-flight clubs and chaired by Vaughn Millette, owner of the Sheffield Sharks.
SLB preference for Zalgiris
Mindful of the need to be ready to start the season in September, Super League Basketball made clear that it would set a deadline for approving any potential buyer of the London Lions.
That deadline, would-be buyers were told, was 7 August — the same day that Hudson Weir went public to solicit offers for the club.
The administrators believed that there would still be scope for buyers to work with GB Basketball to find a solution even if they missed the deadline, but there was no guarantee.
The one party which had met Super League Basketball’s conditions in time was Tesonet, and the new league made clear on 9 August that theirs was the only takeover that it would approve.
“There is only one bidder – the Zalgiris Group – which has met the deadlines and requirements that were required to be involved in the Super League Basketball season starting in September,” said Millette.
Administrator decision
Word reached City A.M. on 13 August that the administrators had struck a takeover deal and that it would be announced the following morning.
On 14 August Hudson Weir confirmed that it had sold London Lions to Tesonet.
The firm said: “We are delighted to report that Tesonet / Zalgiris Kaunas is the new owner of the club, with Hudson Weir managing to complete the sale in a period of less than two weeks from the date the club was placed into administration.”
Hudson Weir also emphasised that the deal would ensure a return for creditors and that all jobs had been saved.
In the end, the takeover of the London Lions went down to the very last day possible. Had the deal been completed any later than the 13th, it is understood that Super League Basketball would not have admitted the team for the 2024-25 season.
London Lions: the future
The club finally broke its silence on the saga on 19 August, confirming the takeover by Tesonet and announcing a partnership with Zalgiris Kaunas, calling it “a significant new chapter”.
Iason Tranos and Ruchae Walton were promoted to general manager of the men’s and women’s teams, with Petar Bozic retained as head coach of the former. The club said work was under way to recruit more players to both rosters.
They also emphasised that the London Lions would now be run on a more sustainable footing, “recognising the club’s previous financial challenges”.
The London Lions will continue to call the Copper Box home but the new owners have promised they will also play at other London venues in a bid to win new fans.
“This is an exciting moment for the club. It is the start of a new journey that will enable the club, its players, fans and all basketball stakeholders to benefit,” said Lions president Lenz Balan.
“We approach the new season not only with financial security but more importantly, with the ability to launch a series of new sustainability practices which will enhance our performance in the league and beyond in the global basketball arena.”